When Demand Is Elastic

question 190

Multiple Choice

When demand is elastic

• A) quantity demanded is very responsive to a change in price.
• B) quantity demanded is not very responsive to a change in price.
• C) the proportional change in quantity demanded is equal to the proportional change in price.
• D) producers react quickly to price changes.

---

Definitions:

Variable Selling

Costs that vary directly with the volume of sales, such as commissions and shipping charges.

Administrative Expense

Administrative expense includes overhead costs not directly tied to a specific project or production process, such as salaries of executive staff, office supplies, and utilities.

Direct Labor-Hours

The amount of time spent by workers directly involved in manufacturing a product or delivering a service.

Raw Materials

The basic substances in their natural, modified, or semi-processed states used as inputs for manufacturing processes.